Amid unprecedented costs for commodities and fuel, organic food prices spiked as much as 25% on retail shelves between April 2007 and April 2008, reflecting a supply crunch that is hitting companies in nearly every food category and at every point in the distribution chain. “This is, without a doubt, the most dynamic and volatile period I've seen in my 25 years in the business,” said Gary Hirshberg, CEO of Londonderry, New Hampshire-based Stonyfield Farm, a leading organic yogurt producer. “There has been nothing even close to this in comparison, and I don't see it ameliorating anytime soon.”
The weakening dollar has compounded the problem, making it harder for some companies to import goods. And many fear that the recently passed Farm Bill — with its large subsidies for growing corn for ethanol — will sway more conventional farmers to pursue biofuels rather than convert to organic. Some farmers have already begun to jump the organic ship, worsening the supply...
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